Pinotage Enterprises sell wine. It uses the perpetual inventory system and the following pre- adjustment trial...

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Pinotage Enterprises sell wine. It uses the perpetual inventory system and the following pre- adjustment trial balance appeared in the books of at the end of their current financial year, 29 Febuary 2020: Debit (R) Credit (R) Capital (1 March 2019) 584 088 Land & Buildings 1 020 000 Drawings 57 600 Trading Inventory 58 320 Debtors Control 167 400 Creditors Control 35 472 Bank 27 480 Loan: ABBA Bank (10.5%) (1 March 2019) 480 000 Sales 1716 000 Cost of Sales 770 400 Sales Returns 84 000 Insurance 33 120 Salaries and Wages 528 000 Stationery 101 400 Repairs 28 440 Rent Income 118 800 Credit Losses 16 200 Interest on Loan 42 000 2 934 360 2 934 360 Additional information and adjustments at year-end: 1. According to a physical stock taking the trading inventory on hand amounts to R57 600. 2. A debtor, N. Chardonnay, is insolvent and his debt of R11 500 must be written off as irrecoverable. 3. An allowance for credit losses must be created, R2 000. 4. The stationery account includes an amount of R4 000 which was paid for repairs conducted on the building. 5. Insurance includes an amount of R850 paid for March 2020. 6. Three tenants rent space from Pinotage Enterprises at an annual rental of R43 200 each. All three tenants occupied the offices for the entire year, and the rent was not increased during the year. 7. The interest on loan for January and February 2020 has not been paid. 8. The owner made an additional capital contribution on 1 January 2020, R50 000. This transaction has not yet been recorded. Q.4.1 Prepare the Statement of profit or loss and other comprehensive income of (23) Pinotage Enterprises for the year ended 29 February 2020. Show all workings. Q.4.1 Pinotage Enterprises (23) Statement of Profit or Loss and other Comprehensive Income for the year ended 29 February 2020 R Revenue Less Cost of Sales Gross Profit Other Income Rent Income Gross Income Less Distribution, administrative and other expenses Insurance Salaries and Wages Stationery Repairs Credit Losses Allowance for Credit Losses Adjustment Net Profit for the year Less: Interest on Loan Profit/ Total comprehensive income for the year Pinotage Enterprises sell wine. It uses the perpetual inventory system and the following pre- adjustment trial balance appeared in the books of at the end of their current financial year, 29 Febuary 2020: Debit (R) Credit (R) Capital (1 March 2019) 584 088 Land & Buildings 1 020 000 Drawings 57 600 Trading Inventory 58 320 Debtors Control 167 400 Creditors Control 35 472 Bank 27 480 Loan: ABBA Bank (10.5%) (1 March 2019) 480 000 Sales 1716 000 Cost of Sales 770 400 Sales Returns 84 000 Insurance 33 120 Salaries and Wages 528 000 Stationery 101 400 Repairs 28 440 Rent Income 118 800 Credit Losses 16 200 Interest on Loan 42 000 2 934 360 2 934 360 Additional information and adjustments at year-end: 1. According to a physical stock taking the trading inventory on hand amounts to R57 600. 2. A debtor, N. Chardonnay, is insolvent and his debt of R11 500 must be written off as irrecoverable. 3. An allowance for credit losses must be created, R2 000. 4. The stationery account includes an amount of R4 000 which was paid for repairs conducted on the building. 5. Insurance includes an amount of R850 paid for March 2020. 6. Three tenants rent space from Pinotage Enterprises at an annual rental of R43 200 each. All three tenants occupied the offices for the entire year, and the rent was not increased during the year. 7. The interest on loan for January and February 2020 has not been paid. 8. The owner made an additional capital contribution on 1 January 2020, R50 000. This transaction has not yet been recorded. Q.4.1 Prepare the Statement of profit or loss and other comprehensive income of (23) Pinotage Enterprises for the year ended 29 February 2020. Show all workings. Q.4.1 Pinotage Enterprises (23) Statement of Profit or Loss and other Comprehensive Income for the year ended 29 February 2020 R Revenue Less Cost of Sales Gross Profit Other Income Rent Income Gross Income Less Distribution, administrative and other expenses Insurance Salaries and Wages Stationery Repairs Credit Losses Allowance for Credit Losses Adjustment Net Profit for the year Less: Interest on Loan Profit/ Total comprehensive income for the year

Answer rating: 100% (QA)

No Adjusting Journal entries Debit Credit 1 Trading inventory 57600 Cost of sales 720 Trading invent... View the full answer